Economics Seminar | Homogeneous Utility Functions with Non-Separable Public Goods: Implications for Consumer Demand, Jan. 29

Dr. Daniel Karney

The Economics Seminar Series presents Dr. Daniel Karney and Khyati Malik discussing “Homogeneous Utility Functions with Non-Separable Public Goods: Implications for Consumer Demand” on Friday, Jan. 29, from 3 to 4 p.m.

Karney is associate professor of Economics at Ohio University. Malik is a Ph.D. student at Ohio State University.

For more information about the Economics Seminars, contact Dr. Roberto Duncan.

Abstract: In a utility model with non-separable public goods, this study finds relationships between the degree of homogeneity of the utility function and both the indirect utility and expenditure functions. Other results then follow including that demand ratios for private goods are invariant to scaling of public goods with income. Thus, private consumption can be distorted if public good provision does not scale with private income. Furthermore, the marginal willingness to pay for public goods does not change when public good provision scales under homogeneity. All results hold for non-marginal changes in public good provision.